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$100 vanishes. the next year, another $100. where am i going, carl ? thnext year... th was weird. but awesome ! ♪ nationwide is on your side ♪ >> this week on the journal editorial report. who are debt deal drama as the so-called grand bargain falls apart. even if congress gets something passed. is it too late to avoid a credit downgrade. it's the anniversary of dodd-frank, not everybody a celebrating. and steve winn unloads on the policies, do others share his views. and two federal agencies have become the last bastion for pro union policies we'll tell you who they are and what they're up to.
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welcome to the journal editorial report, i'm stuart varney in this week for paul gigot. dramatic developments in debt ceiling showdown as house speaker john boehner called off talks on the so-called grand bargain. both sides meeting today. even if they get an agreement. is it too late to avoid a credit downgrade? joining the panel this week, wall street journal editor, james freeman. columnist, mary o'grady. kim strassel and steve moore. to you first, kim, if i may. are we looking more and more like greece? >> well, this is been one of the more remarkable aspects of this debate, stuart, in that only a few months ago both the white house and rating agents say we want you to have a clean debt ceiling hike, get it over with and then you'll be fine. increasingly the rating agencies are saying, actually you need to show us, demonstrate some sort of significant cuts or you might also, nonetheless, be at risk
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of a downgrade, too. so there's sort of two threats out there, hanging over congress's head. a deal potentially that shows some sort of significant progress on deficit cutting. >> if you look down the road. i press the question. do we look like greece? >> look, i have to tell you, if you talk to people in congress right now, they're not overwhelmingly concerned about this and that they believe that some sort of deal will show some sort of progress and that they will avoid a debt downgrade. at least for the near term. down the road, that's a harder question. >> mary? do we-- we're going to be downgraded. >> whether we get downgraded or not. i don't think that's going to have that big an impact on the treasury markets. right now, there's a flight to quality and everybody is coming to the u.s. i think with more important and with the markets will be looking for is how this is handled politically. if the debt ceiling is raised and it's a big victory for president obama, because the republicans play into his hands, then i think it's going
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to spell, you know, looking forward that there's not going to be any structural changes, that we are going to have our tax increases and so forth. but if the republicans give this to president obama and say, look, we did our best. we wanted to cut spending, we wanted to cut taxes, and you didn't let us. and if president obama is forced to own that, then in november, 2012, there will be a referendum on that question. >> james, i can't help, but think that if we are downgraded, our financial reputation, our standing in the world, takes a hit. so, you know, i press that question, is a downgrade looking ever more likely? >> well, i think whether or not moody's and standard & poors the big credit rating agencies, it's great right now they're putting pressure on the politicians to step back from the brink of disaster, that's great. if they affirm the triple-a rating that doesn't mean the investors around the world will accept that decision. basically you look at recent
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history, enron, worldcom. mortgage-backed securities during the financial crisis, lehman brothers, these were all highly rated instruments by the ratings agencies. until the moment when investors realized they were wrong. >> they were highly rated until they weren't. >> exactly. so what we have to worry about, i think as mary said, what investors think and are they satisfied that the u.s. is going to pay its debts and it's still the greatest credit in the world and a judgment much bigger and important than the ratings agency said. >> this is a structural problem, it's not something you paper over. >> that's how we like greece. >> we're not like greece yet and as kim said this is going to take time. the question the markets will be looking at. is there any capacity for the political system to face the structural problem? and i think that will depend a lot how this is handled politically by the republicans. >> steve, treasury secretary geithner should be right in
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the middle of this. is he? >> well, you know, i think he's acted incredibly irresponsibly, stuart, after all what has he been doing the last couple of months, running around the country and telling the american people and investors around the world that the united states may have 0 default on its debt. that's creating the sense of panic that we have been talking about, that puts america in a more precarious situation. and i think tim geithner should be doing the opposite. no matter what happens on august 2nd there will not be a default. they will pay the creditors and full faith and credit of the u.s. government will be in fact and he's doing the opposite for political gain. i think the issue whether the rating agencies downgrade or not is beside the point. the worry that i have, stuart, is that if we pass a debt ceiling negotiation, that is not something that the-- international investors believe is serious about bringing this debt down, i think that's what could
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trigger a run on the dollar, an increase in the price of gold and an increase in interest rates. don't forget, stuart, this week, the gold price went to $1600 for the first time in history. now, these people are getting very worried about the u.s. >> okay, james? >> i would just add to that, to answer your question, yes, we are on the road to greece. if you look at the budget plan over the next ten years, the obama budget. another 10 trillion of debt even if we do nothing. in the 7 trillion range on top of what we have. there is a course correction needed. underlining steve's point, what would tell global investors we're headed toward sanity is significant cuts in year one. >> you mean, james, 2 billion dollars isn't enough in the first year. >> not going to do it. >> a sense of proportion, steve moore, come on. >> you only have a 1.5 trillion dollar debt. >> we do indeed. still ahead, did you hear
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this? casino mogul steve wynn let loose in a rant that you can't miss. what he said and whether other what he said and whether other ceo's [ male announcer ] if you think "heroes" are only in movies, consider this: over 70% of firefighters are local volunteers... these are our neighbors putting their lives on the line. and when they rely on a battery, there are firefighters everywhere who trust duracell. and now you can join with duracell to help.
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>> this week marks the one year anniversary of the dodd-frank financial reform bill. in an op-ed on the wall street journal, timothy geithner defended the measure, saying it was designed to lay a stronger foundation of innovation, economic growth and job creation. but if the administration was hoping for a big thank you from business leaders, they may be in for a very long wait. wait. speaking to investors on a conference call, this week, casino mogul and democrat donor, steve wynn went on a rant it against president obama and his economic policies. here is just some of what he had to say. >> i'm saying it bluntly, that
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this is administration is the greatest wet blanket to business and progress and job creation in my lifetime. and i'm telling you, that the business community in this country, is frightened to death of the weird political philosophy of the president of the united states. and until he's gone, everybody's going to be sitting on their thumbs. >> you have to admit fairly strong stuff. steve moore, do you think that sentiment, harsh as it was, is widespread in the executive suite? >> you know, i think that steve wynn is likely to be subject to an irs audit sometime very soon after that, because when you go after the white house they come after you. this was a courageous thing for steve wynn to say to speak out and say what a lot of ceo's around the country will say privately, but few have the courage to say publicly, which is that almost everything obama has done over the last two and a half years has been anti-business, a
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assault against employers and can't tell you how many times when i go across the country and talk to ceo's or j us people who run burger kings and mcdonald's, they feel they've been under assault from washington. whether it's obama care, whether it's the talk of new taxes widespread. >> that's interesting because what steve wynn said out in public, you say that other executives say to you behind closed door in private. >> yes. >> in the same terms and same strong language, really? >> not quite as strong as steve used, but the same sentiments, that the policies in washington are putting them in a kind of catatonic state where they won't expand their businesses and they won't hire new workers because they don't know what new regulations and what new tax come in next. >> mary, it seems like this is a downward spiral. this happened pretty quickly. >> yeah, i don't find steves comments about people he meets very surprising. even in the news there's a
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sort of growing crescendo growing against the president's policies. you see jamie dimon talking about the regulation in the financial industry and see john angler from the national manufacturers. tom at the u.s. chamber has been critical of the president on trade. you know, there is a growing willingness on the part of business often these very rich businessmen who normally are-- >> yes, key word, very rich. i thought that the executive elites of this country were firmly pro obama. and i think that was true in 2008, james. >> many of them were. he's scaring them. and it's not just what we hear when people come through our offices or see on travels. the executives of this country are telling us with their decision making, s&p 500 is sitting on 963 billion dollars of cash. that is an expression of fear, basically, that-- or at least uncertainty that
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they don't see an investment they have confidence to pull the trigger on. >> it's fear about the economy's future, but it's not outright hostility to the presidency and this administration's economic policy, is it? >> look at layoffs, the number that five week number that tells us, it's terrible news and everything that business is doing, fear, uncertainty, can't commitment to a long-term business. >> president obama's attempts to court business elite. based 0en what we just heard, falling pretty fat. >> look, a lot of these business executives took them long enough to get here. this is a lot of the business community that helped pass obama care and went along with dodd-frank because they wanted to be seen to be cooperative and the business round table and some of the industry groups. now, they are deciding that whoops, that was a big mistake and the white house knows it's losing its grip over that community.
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the appointment of thing like bill daily, chief of staff. a banker, jim spurling, running the economic county from the business community, but the business community isn't buying it, because basically, as speak louder than appointments and even as they've been putting these supposedly pro business people into white house positions, you've had terrible new regulations coming out, you know, the president's continued to demagogue them, and new talk about tax hikes, so, they're beginning to learn their lesson. >> let me throw some red meat back on the table. steve wynn used the word socialist and checked it right out there. and steve moore, is president obama a socialist? >> no, he's not a socialist, but everything he's done on the economy has had one underriding theme, and that is that he wants to radically redistribute income and that means taking money from the rich and from companies and giving it to lower income people and i think that's a philosophy that always fails and by the way, one other
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point. one reason, kim, that more companies don't speak out against these, the federal government is the biggest customer, to a lot of the companies. they worry if they complain they're going to lose a lot of business. >> the problem that they're experiencing now, though, stuart. they've now realized that without consumer demand picking up in this country. without people actually coming and buying their products, they're not going anywhere. and that is not going to be restored until people start having jobs, and those people are able to spend money and that's why they consider what president obama is doing as a weird political philosophy. >> james, last word to you. >> well, i think you're seeing, if there is fear among ceo's, to say something. there's not fear among the retired ceo's, co-founders of the home depot has been swinging freely-- >> i think the key words,
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weird political philosophy and socialist, let's leave it at that. if business leaders think they have it tough now. the plan to make union organizing easier and much, much easier actually when we come back. [ male announcer ] to the 5:00 a.m. scholar. the two trains and a bus rider. the "i'll sleep when it's done" academic. for 80 years, we've been inspired by you. and we've been honored to walk with you to help you get where you want to be ♪ because your moment is now. let nothing stand in your way. learn more at riding the dog like it's a small horse is frowned upon in this establishment! luckily though, ya know, i conceal this bad boy underneath my blanket just so i can get on e-trade and check my investment portfolio,
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>> well, if business leaders think they've got trouble now. wait until they get a load of this. the national labor relations board held a board hearing this week. on the agenda, just the most sweeping changes to union organizing rules since 1947. championed by obama appointee and former labor lawyer, greg becker. the newer rules making it easier for a union to organize. gap between when they file and
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organizing elections and ballots are cast. kim, what's the big deal about shortening the time frame down to ten days? >> look, you have to step back here, stuart. what's going on. unions have been losing membership, so they are desperate for some sort of way to stack the deck in their favorite and get more people into unions. what you do when you reduce dramatically the amount of time frame is you're making it so the companies cannot present a case to employees against union membership and the idea that they need to reduce this amount of time is so ludicrous, as it is, unions win two out of three union elections they put forward. the average between 30 days anyway, this is just designed to ram things through as quickly as they can so employees don't know what hit them. >> mary? >> you asked me before if we were becoming like greece and what, you know, one of the objectives here on the part of the administration is to make the labor market less flexible through greater amounts of
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unionization. and if he succeeds, then, you're going to have more difficult time in the united states with recovery from recession, which we're going through now. and job creation, so, you know, i think it's-- it would be absolutely devastating if the administration was allowed to basically circumvent card check which it wasn't able to get and instead, you know, force this change. >> is there that much to do about it? craig becker is on the national labor relations board, a former labor lawyer, a big power within that board and pushing for this. if he gets it, if he gets it, you could get it. there's not like there's any other counter veiling force. >> now you're saying the president has a right to decree through his agencies. if that's where we've arrived maybe the road to greece is shorter than we thought it was. >> james. >> i keep waiting for the obama administration's reelection instincts to kick in.
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sitting here with 9.2% unemployment and nlrpb is on the offensive, not just for that, but trying to punish boeing for a new plant in south carolina, not firing any union workers in seattle. just expanding into south carolina. we've run the experiment, the heavily unionized states are laggards, have high unemployment. the states with less union activity, texas are the job creators. why he wants the president's administration, i should say, wants to move more toward the union model is amazing. >> i've got an answer, got an answer to that, james. i think the answer is very clear. that the modern day democratic party is a fully owned subsidiary of the a. fl, ceo. the by far, biggest contributor to democrats around the country, state, local and federal elections is the big labor unions, and that's why almost every decision that has been made over the last two and a half years when it comes to the economy has benefitted the labor unions, by the way, i do
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think, stuart, that this is an assault against the rights of individual workers to decide for themselves, whether they want to join unions or not. >> i just wonder if playing the union card is, is it still a powerful political card? union membership, therefore, votes is shrinking and they're deeply in debt, having supported president obama in the '08 election, do they have the manpower? do they have the money to make them a viable and potent political card? kim, do you have an answer on that one? >> yeah, look, the president is even under more pressure than unusual though to help unions. here is why, because they're on defense across the country. look out at the debates that are happening in all of these states and wisconsin to new york, and you have even blue state governments demanding the public sector unions, one of the more rapidly growing of the union market. do they give up all of these benefits? so they're under assault and turning to the white house and they are making it very clear, they're saying, give us
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something. stump up or you're not going to have the support that you want in your 2012 election, which by the way you need because we send manpower out and they have it. >> jamie: i'm not sure where else the unions coulding politically? >> they could sit it out. >> you're right, kim. i'm sorry. james? >> i think in terms of state governments, we'd like to point out we've had the last year the big fight with public employees saying we must have collective bargaining, this is a fundamental right akin to free speech, but we learn this week from the democratic head of the new jersey senate who just did the big pension reform deal, steve sweeney told us that the unions did not want collective bargaining on health care because they thought a better deal if it was written into the law. so-- >> they did not want collective bargaining rights on health care. steve sweeney, the president of the iron workers union in new jersey if i'm not mistaken. >> theater. and runs the state senate. >> he said that. >> would,ed with governor
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christy to reform the pensions there, at the end of the day on health care, the unions did not want collective bargaining he says, they wanted better benefits written into law, embedded into the statute. so-- >> that would be a better way to go. >> for anyone who thinks that collective bargaining is a fundamental right of the constitution, even unions were ready to give it away for a better deal. >> all right, everybody. we have to take one more break, when we come back, hits and misses of the week for you. woman: saving for our child's college fund was getting expensive. man: yes it was. so to save some money, we taught our 5 year old how to dunk. woman: scholarship! woman: honey go get him. anncr: there's an easier way to save. get online. go to get a quote. 15 minutes could save you 15% or more on car insurance.
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>> and now the ever popular time for our hits and misses of the week and james, you're first. >> well, this is a big hit to michele bachmann, stu. this is not necessarily an endorsement of her candidacy. big credit to her, this week at a campaign event and someone asked her why don't we just raise taxes on corporations? and she used the opportunity to point out that in fact, roughly half of americans don't pay any income taxes at all and maybe it's time to even, if it's a small amount, get everyone to be in this together. it's a great point. listening to president obama, the rich and businesses are tax exempt and generate most of the revenue. >> mary, what do you have? >> this is a miss for congress woman sheila lee jackson from texas who said that in conversations about the debt ceiling debate, she said that she was particularly sensitive to the fact that only this president, only this one, had
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received the kind of attacks and disrespect and so forth that president obama is getting, obviously making references to the fact na she believes this has something to do with race and i would remind her that only this president, only this president tied a weight around the ankle of the u.s. economy with obamacare and is dragging it to the bottom of the ocean, and that that is why he's running into this problem and has nothing to do with race. >> millstones around the neck, very good. steve, what do you have. >> as regular viewers of this show know, i just hate soccer, but i have to say even i was captivated by the high drama of last week's women's cup. what a chls pr by the united states team, incredibly courageous, a valiant comeback against france only to be undown by the japanese and out did the u.s., if i cut me i'd bleed, red white and blue, but
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